As someone new to this community and small business ownership, I've found this entire discussion incredibly enlightening. The original question about using business funds for personal CDs seemed reasonable on the surface, but reading through everyone's responses has really opened my eyes to the complexity of maintaining proper corporate compliance. What strikes me most is how a seemingly simple decision to chase better interest rates could potentially unravel years of careful business structure planning. The warnings about piercing the corporate veil and audit flags are particularly sobering - it's clear that the IRS takes fund commingling very seriously. I'm grateful for the practical alternatives that have been shared here, especially the Treasury bills option through TreasuryDirect. At 4.5-4.8%, that actually beats most of the personal CD rates while keeping everything properly documented and compliant. The state tax exemption mentioned is an added bonus I hadn't considered. This discussion perfectly illustrates why community forums like this are so valuable for small business owners. Sometimes the expertise and real-world experience shared by fellow entrepreneurs is worth more than expensive consultations. Thanks to everyone who took the time to share their insights - you've probably saved multiple business owners from making costly compliance mistakes.

As a newcomer to this community, I've been following this discussion closely since I'm dealing with similar cash flow decisions for my small consulting firm. The unanimous advice against commingling business and personal funds really resonates - it's clear that maintaining clean separation is absolutely critical for S-corp compliance. What I find most valuable about this thread is how it demonstrates the importance of thinking beyond just the immediate financial gain. That extra 0.5-0.7% interest rate difference seems appealing until you factor in the potential audit risks, accounting complications, and possible loss of corporate protections. The cost-benefit analysis just doesn't work out when you consider all the downstream implications. The Treasury bills suggestion at 4.5-4.8% through TreasuryDirect seems like the perfect solution - actually better rates than most personal CDs while keeping everything properly documented for business purposes. I had no idea this was even an option for business accounts, so I really appreciate everyone sharing their knowledge here. This discussion has definitely reinforced my commitment to doing things the compliant way from the start, even when shortcuts seem tempting. Thanks to everyone who shared their experiences and expertise - it's exactly this kind of practical guidance that makes community forums so invaluable for small business owners navigating these decisions.

Has anyone run into issues with clients not understanding the difference between a single-member LLC with C corp election vs an actual C corporation? I've had clients question my W9 because they expected to see the C Corporation box checked instead of the LLC box with "C" written in.

This is such a common source of confusion! I went through the exact same thing when I first set up my single-member LLC with C corp election. What really helped me was creating a simple checklist for W9 forms: 1. Check "Limited liability company" box (never the C Corporation box) 2. Write "C" in the tax classification field next to LLC 3. Use your EIN, not SSN 4. Business name should match exactly what's on your SS-4/EIN letter 5. Keep a copy of your election form (Form 8832) handy in case clients have questions The key thing to remember is that the W9 reflects your legal entity structure (LLC) plus your tax election (C corp treatment). Your clients are paying an LLC that happens to be taxed as a C corp, not an actual C corporation entity. I also recommend keeping a brief explanation document ready for clients who question why you didn't check the C Corp box - it saves a lot of back-and-forth emails!

As someone who's been preparing taxes for family and friends for a few years now, I wanted to add that the confusion around Box 14 is totally understandable - it really is one of the most poorly explained parts of the W-2 form. One thing I've learned is to always check if your employer includes a legend or explanation somewhere on the W-2 or in their year-end documentation that explains what their specific Box 14 codes mean. Some employers are better than others at providing this context. Also, if you're using tax software and it has an "import W-2" feature where you can take a photo or upload the form, those tools are getting pretty good at automatically categorizing Box 14 entries and telling you which ones need action versus which are just informational. It can save you from having to manually decode each entry. The state-specific deduction advice everyone's shared here is spot-on though - those are definitely the ones to watch for since they can actually impact your tax liability. Everything else (health premiums, parking, most fringe benefits) you can generally ignore for tax purposes even though your employer felt compelled to report it.

This thread has been incredibly helpful! As someone who just started doing my own taxes this year, Box 14 was seriously intimidating. I had entries for "DENTAL," "VISION," and something called "COMMUTER" that made no sense to me. After reading through everyone's advice about the informational vs. actionable distinction, I realized I was overthinking it completely. The dental and vision are clearly just employer-paid premiums (informational only), and the commuter benefit is probably just my transit subsidies that are already tax-free. I love the tip about checking for employer legends too - I found a tiny explanation section that I totally missed before. It's amazing how much clearer everything becomes once you know what to look for! One question though - I also have an entry that just says "MISC $150" with no other explanation. My employer's legend doesn't clarify what this is. Should I be concerned about entering this somewhere, or is it likely just another informational item? It seems too vague to be anything important but I don't want to miss a potential deduction.

Just to add some perspective - your $750 in unreported income probably won't trigger a major issue, but it's definitely worth addressing proactively. The IRS gets copies of payment records from apps like Venmo, PayPal, Square, etc., so if any of those cash payments went through digital platforms, they likely already have that information. Even if it was all truly cash with no paper trail, filing an amended return shows good faith effort to comply. The additional tax on $750 of self-employment income would probably be around $100-150 depending on your tax bracket, plus maybe some interest. Much better to handle it yourself than wait and potentially face accuracy penalties later. I'd recommend keeping better records going forward - even a simple spreadsheet or phone notes can help track cash payments as they happen. Makes tax time so much less stressful!

I went through something very similar last year and want to share what I learned. "Accepted" definitely doesn't mean you're in the clear - it just means your return passed the initial computer checks and entered their system for processing. The IRS has automated matching systems that compare your reported income against forms they receive from employers, banks, payment processors, etc. If there's a mismatch, you'll likely get a notice (like the CP2000 others mentioned) months later asking about the discrepancy. For your $750 in unreported cash income, I'd strongly recommend filing Form 1040-X to amend your return. Even if it was truly cash-only with no digital trail, being proactive protects you from potential penalties and shows good faith compliance. The self-employment tax on $750 would probably be around $106 (15.3% SE tax) plus regular income tax depending on your bracket. I dragged my feet on a similar situation and ended up paying more in interest than if I'd just amended right away. The peace of mind is worth it - you'll sleep better knowing everything is properly reported!

Just wanted to add one more consideration that might be relevant to your situation - the timing of when you actually close on the sale versus when you report it for tax purposes. If you're doing an installment sale or have any seller financing involved, the tax treatment of both the depreciation recapture and the suspended passive loss release could be spread over multiple years rather than all hitting in the year of sale. Also, if you've made any capital improvements to the property that weren't fully depreciated, make sure those are properly included in your adjusted basis calculation. I've seen people miss this and end up with higher depreciation recapture than necessary. The IRS resources others have mentioned (particularly Publication 925 and IRC Section 469) are definitely your best bet for official guidance. If you're still uncertain after reviewing those, consider getting a private letter ruling from the IRS for your specific situation, though that's probably overkill unless you're dealing with a very large transaction or unusual circumstances.

As someone who recently went through a similar situation with passive losses and rental property sales, I can confirm that your calculation approach is correct. The $130K in suspended passive losses will indeed offset the $145K depreciation recapture, leaving you with approximately $15K in taxable gain. One thing I'd recommend is double-checking your records to ensure you have documentation for all those passive losses. The IRS will want to see a clear trail showing how you accumulated $130K in suspended losses over the years. Make sure your previous Form 8582s properly show these losses being carried forward annually. Also, consider the timing of your sale carefully. If you're close to year-end, you might want to evaluate whether there are any other tax strategies that could benefit from the passive loss release. For instance, if you have other passive income sources, the timing of this sale could impact how those are taxed. The official IRS guidance everyone has referenced is spot-on - IRC Section 469(g)(1) and Publication 925 are your primary resources. I'd also suggest reviewing Revenue Ruling 87-9 which specifically addresses rental property dispositions with suspended passive losses. Having these official citations will be helpful if you ever need to explain the treatment to a tax preparer or during an audit.